A Bankrate survey released this week revealed that since the Federal Reserve began raising interest rates in March 2022, half of loan or financial product applicants have faced denials, with almost 1 in 5 experiencing multiple rejections.
"One of the ways higher borrowing costs wrestle inflation is by slowing the flow of credit to households and businesses," said Sarah Foster from Bankrate.
Younger generations and parents of minors were particularly affected, with 58% of Gen Z and 60% of millennials being denied, while more than 8 in 10 individuals who were denied reported negative financial impacts, such as increased stress and turning to alternative financing.
"One of the best ways Americans can insulate themselves from higher interest rates is by concentrating on their credit score, which may be the factor that impacts them more than the Federal Reserve itself," said Foster.
What are some ways to raise your credit score?
"Lower your debt-to-income ratio, make payments on time and aim to utilize no more than 30% of your available credit," Foster said.
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